On February 28, ISDA submitted a response to the UK Climate Change Committee (CCC) call for evidence on carbon offsets. The CCC is an independent statutory body advising the UK government on emissions targets that is planning to develop a more in-depth piece of work on voluntary carbon offsets, which will culminate in a report on offsets to be published later in 2022.

In its response, ISDA highlights its interest in the development of a robust voluntary carbon offset market that will strengthen the functioning of the carbon derivatives markets and enable the continued development of liquidity in derivatives products so that market participants can appropriately manage their business risks. It points out that one of the main obstacles to advancing voluntary carbon trading is a lack of clarity about the legal nature of voluntary carbon credits that is necessary to create robust voluntary carbon credit markets, which in turn will enable the development of a clear price signal for carbon and allow funds to be efficiently channeled towards emissions-reducing projects.